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What Can Penny Stocks Investors Expect in August 2021?

What do penny stocks investors need to know about trading small-caps in August?
The post What Can Penny Stocks Investors Expect in August 2021? appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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3 Things to Keep In Mind If Investing in Penny Stocks in August 

With August only a week or so away, there are plenty of things on penny stocks investors’ minds. And, after a week of wild trading commences, many investors are left wondering what next month will have to offer. On July 19th, much dismay was felt around the stock market as the S&P 500 dropped by over 700 points. This was a sharp response to higher case numbers as a result of the Delta variant. 

And, while Covid had not had a major effect on the market over the past few months, Monday marked the day that it showed its ugly face once again. While no one can predict where the pandemic is headed now, many believe that it will still work its way into trading both penny stocks and blue chips. And for this reason, it’s one of the most important aspects to keep in mind right now. The next thing we have to consider is the effects of Reddit and Robinhood on penny stocks

Both of these have shifted the way that stocks trade over the past year and a half, and continue to do so. As you can see, buying and selling penny stocks is all about understanding how different factors will affect the market. And with so much to consider, let’s go in-depth into a few need-to-knows for next month. 

3 Things Penny Stocks Investors Should Know For Next Month

  1. Volatility With Penny Stocks is Here to Stay 
  2. Keep an Eye on Current Events 
  3. Know Your Investing Strategy 

Volatility With Penny Stocks is Here to Stay 

When it comes to trading penny stocks, volatility is one of the mainstays that investors have to deal with. On Friday, we saw massive price swings with certain stocks. This includes those such as Meta Materials Inc. (NASDAQ: MMAT), Medigus (NASDAQ: MDGS), GameStop Corp. (NYSE: GME). But if you have the right tools at your disposal, volatility can be put to use as an asset rather than something to incite fear. 

The best way to take advantage of large price swings is to have a trading strategy. This is something that all great traders utilize and is also something unique to your investing strategy. With so much movement, it can seem like a lot to keep track of everything at once. But, with individual rules for your portfolio, trading can become automatic once you find a penny stock you’re interested in. 

And, with several geopolitical events occurring at once combined with the inherently volatile nature of penny stocks, we will likely continue to see prices move up and down during next month’s trading. But, to stay ahead, investors should consider what is driving price movement and how to take advantage. 

Keep an Eye on Current Events 

Keeping an eye on current events is one of the best methods to making a profit with penny stocks. As mentioned earlier, volatility may be up and down, but speculation is occurring almost all of the time and is the driving force of volatility. For this reason, we can use speculative events to our advantage to try and predict price movement. 

current events penny stocks

As an example, let’s say Covid cases rise as they are right now. This would drive investors to both safeguard stocks such as mining stocks, but also to reopening penny stocks. It’s important to consider the time frame that you wish to invest in as well because this can help to determine which stocks you may be interested in. So, besides Covid, we have to consider what else is going on in the market. 

Right now, another factor is Reddit and the effect of social media on penny stocks. This is nothing new per se, however, it has only become a major mover and shaker in the past year or so. The effect of social media on penny stocks began with the likes of GME stock and AMC stock but quickly extended into a wide range of both blue chips and penny stocks. And in 2021, this notion does not look like it is going anywhere. So, considering all of this, understanding what is making the market move, will be a major asset to your portfolio. 

Know Your Investing Strategy 

This has been mentioned frequently in this article, and across other articles on the site. However, having an investing strategy remains one of the most important things you can do to align your portfolio with your investing goals.

investing strategy penny stocks

Let’s say you’re looking for long-term growth in your account. You would likely not go for the most volatile penny stocks, but rather for those that could break out of penny stocks territory in the long term. And, this goes for the opposite as well. Without a trading strategy, investors are subject to FOMO (fear of missing out), and potential losses based off of trading on emotion.

Ask any pro trader and they’ll likely give you a quick list of the principles that they follow on a daily basis. And, what better time to make a trading strategy than with a new month ahead. So, considering this, are you a long-term or a short-term trader? What are your goals in that time frame? And, what area of the stock market is your portfolio focused on? These questions will help to align your August penny stocks watchlist with your overall likelihood of meeting your goals. 

Will Penny Stocks Continue to See Gains Next Month?

The short answer to this question is that it’s anyone’s guess. While there is a lot of positivity in the stock market right now, penny stocks tend to change quickly on a daily basis. For that reason, using the above tips will help to give you the best chance at making money with penny stocks.

And while a new month may not be the cause of major gains off the bat, it is a symbolic reset that could help to put the market back on a bullish trajectory. Considering this, what do you think? Will penny stocks continue to see gains next month?

The post What Can Penny Stocks Investors Expect in August 2021? appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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Economics

MLB trade rumors and news: Padres DFA Arrieta, Severino pitches for first time since 2019

Photo by Jeff Curry-USA TODAY SportsThis could be the end of the road for the 2015 NL Cy Young winner. The MLB Daily Dish is a daily feature we’re running here at MLBDD that rounds up roster-impacting news, rumors, and analysis. Have feedback or have s…

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Photo by Jeff Curry-USA TODAY Sports

This could be the end of the road for the 2015 NL Cy Young winner.

The MLB Daily Dish is a daily feature we’re running here at MLBDD that rounds up roster-impacting news, rumors, and analysis. Have feedback or have something that should be shared? Hit us up at @mlbdailydish on Twitter or @MLBDailyDish on Instagram.

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Economics

Why Monday’s Decline Was So Shocking

It’s no secret that investors had become accustomed to a historic level of calm. We’ve been looking at this since the spring, it usually doesn’t last, and yet it did for months.Even with a late-day recovery on Monday, the loss in the most widely-benchm…

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It's no secret that investors had become accustomed to a historic level of calm. We've been looking at this since the spring, it usually doesn't last, and yet it did for months.

Even with a late-day recovery on Monday, the loss in the most widely-benchmarked index in the world was a rude awakening to those who believe that stocks only travel in one direction. Monday's session was more than two standard deviations from the average daily change over the past year. The only other day with a -2 z-score over the past year was May 12, which marked the bottom for that pullback.

It had been nearly 90 days since that "shocking" decline in May, which is a relatively long time. Over the past decade, this ranked as the 10th-longest stretch between shocking drops.

Most of us are concerned with the question of "so what?" To help give a clue, the table below shows every time since 1928 when the S&P 500 was within 5% and no more than three weeks removed from a multi-year high, then suffered its first -2 standard deviation move in at least four months. These show the times when reality paid investors an unwelcome visit.


What else we're looking at

  • Full returns after stocks suffer a shocking drop
  • What the risk/reward of all precedents suggest about the coming week(s)
  • Potentially ways to manage a couple of options trades that are now profitable
  • A quick update on copper
  • Looking at several mean reversal signals that have set up (but not yet triggered)

Stat box

Put option trading volume in equities and indexes across U.S. exchanges neared 22 million contracts on Monday. That was the 6th-highest reading in the past 5 years.

Etcetera

Heavy industry. Recent losses are weighing on sentiment in industrial stocks. Over the past 10 days, the average Optimism Index on the XLI Industrials fund has been below 25%, the 2nd-lowest in two years. These stocks tend to do well once sentiment starts to recover from a very low level.

xli industrial sentiment optimism index

Oscillators oscillate. The McClellan Oscillator for industrial stocks has plunged below -100, showing quick and severe internal selling pressure. It was above +50 as recently as the end of August. The current reading is on par with the most severe reactions in the past year.

xli industrial mcclellan oscillator

Sell (almost) everything. Heavy selling pressure is also evident in the 10-day advance/decline line for industrials. It's showing an average of nearly 20 more stocks declining than advancing, nearing the most lopsided selling pressure since the pandemic crash.

xli industrial advance decline line

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Economics

Fed Urged To Fire Officials Over “Pandemic Profiteering”

Fed Urged To Fire Officials Over "Pandemic Profiteering"

Two weeks ago, Fed Presidents Robert Kaplan and Eric Rosengren (and to a lesser, though still notable extent, Fed Chair Powell himself) were ‘outed’ for their multi-million-dollar stock

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Fed Urged To Fire Officials Over "Pandemic Profiteering"

Two weeks ago, Fed Presidents Robert Kaplan and Eric Rosengren (and to a lesser, though still notable extent, Fed Chair Powell himself) were 'outed' for their multi-million-dollar stock and bond trades, sparking widespread outrage, bolstering claims that not only is the market rigged and manipulated by the Fed but that it is rigged directly for the benefit of Fed members like Kaplan and Rosengren who - whether they intended or not - benefited monetarily from their own decisions and their inside information that nobody else was privy to..

While none of the transactions appears to violate the Fed's code of conduct, CNBC reported, municipal bonds are an asset class that are far more niche that stocks or ETFs. 

Officials “should be careful to avoid any dealings or other conduct that might convey even an appearance of conflict between their personal interests, the interests of the system, and the public interest," the Fed's code of conduct says.

It was such 'bad optics' that less than two days after the widespread public fury at this grotesque discovery, the presidents of the Federal Reserve banks of Boston and Dallas said they would sell their individual stock holdings by Sept. 30 amid "ethics concerns", and invest the proceeds in diversified index funds or hold them in cash.

While we are sure the Fed officials hoped this would satisfy the ignorant masses... it has not. And as The Wall Street Journal reports, two advocacy groups and a former Fed adviser have said that The Fed should fire at least one (and perhaps both) of the Fed officials over their "pandemic profiteering trading conduct."

Better Markets, a group that pushes for tighter financial regulation; the left-leaning Center for Popular Democracy’s Fed Up campaign; and Andrew Levin, a former top Federal Reserve staff member and now a professor at Dartmouth College, are calling for the Fed to take action against Messrs. Kaplan and Rosengren.

“It’s time for the Fed to do what leaders are supposed to do:  Lead by example,” Better Markets president and chief executive officer Dennis Kelleher wrote in a letter sent to Fed Chairman Jerome Powell Tuesday.

Messrs. Kaplan and Rosengren, both should resign or be fired “for having lost the confidence and trust of the American people and, one would think, the Chairman of the U.S. central bank,” Mr. Kelleher said.

As The Fed is about to shift policy regimes into a taper of its unprecedented fre-money-gasm-machines, Mr. Kelleher added:

“This is no time for the American people to lose confidence and trust in the Fed, which must be above reproach, not set the lowest bar for ethical and legal conduct,”

Some Fed watchers say the trading raises questions about who policy was designed to help.

“There are a lot of reasons that working people are right to wonder if the Fed has their best interests in mind,” said Benjamin Dulchin, campaign director for Fed Up.

“These trades are only the most obvious reason, but it makes it harder for the Fed to do its job,” Mr. Dulchin said, adding if he were Mr. Kaplan or Mr. Rosengren, “I would resign.”

There is, however, one man supportive of Kaplan - his predecessor at the Dallas Fed, Rich Fisher, who shrugged off the million-dollar trades as nothing, noting that in fact, Kaplan was "talking against his own book..."

But, 'Dick', actions speak louder than words eh? And now that he has been shamed into cutting all market exposure, who cares whether he is hawkish or dovish - he's made his!

Source: NorthmanTrader
Tyler Durden Wed, 09/22/2021 - 08:25

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